German consumer sentiment continues to recover slowly

Shiva Singh
WIESBADEN,GERMANY-FEB 18:SATURN store on February 18,2015 in Wiesbaden,Germany.Saturn is a German chain of electronics stores, now found in several European countries.

Belgium, (Brussels Morning Newspaper) The monthly survey by GfK institute shows that consumer sentiment in Germany continues to recover slowly.

Positive trends are set to continue in 2023 as government aid measures aimed at cushioning the blow of rising energy prices appear to be effective, according to Reuters reporting on Wednesday.

GfK noted that its consumer sentiment index heading into January stands at negative 37.8 points, slightly higher compared to negative 40.1 in December and barely above analysts’ expectations of negative 38.

GfK consumer expert Rolf Bürkl noted “with the third rise in a row, the consumer climate is slowly working its way out of the trough… the light at the end of the tunnel is getting a little brighter.”

Despite growth, consumer sentiment is still very low as negative 42.8 points in October was the lowest level in more than a decade. GfK pointed out that negative values suggest annual decline in personal consumption.

Bürkl warned that recovery is flimsy and could be reversed, for instance, by sharp growth of energy prices. “The light at the end of the tunnel would become darker again very quickly, or even go out altogether,” he stressed.

All sub-indices up

GfK pointed out that all consumer sentiment sub-indices grew in December, with income expectations jumping from negative 54.3 points to negative 43.4 due to moderate growth of energy prices and one-off natural gas aid for households.

The willingness to buy sub-index increased from negative 18.6 points to negative 16.3, with GfK noting that the indicator represents the ratio between negative and positive responses to the question “do you think now is a good time to buy major items,” which reflects consumers’ expectations about household finances in the coming year.

The business cycle expectations sub-index recovered from negative 17.9 points to negative 10.3, which indicates consumers’ expectations of general economic trends in the next 12 months.

The institute reiterated that index values below zero indicate annual decline, stressing that one point corresponds to annual change of 0.1%.Last month, data showed the German economy grew 0.4% on quarterly level in Q3, indicating that the economic downturn will not be as severe as initially expected.

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Shiva is a professional digital marketer who covers the latest updates in the tech industry from across the globe. With an experience of over 5 years in the world of Information Technology, he likes to keep up with every major development and writes fact-based pieces backed by in-depth research.